Hang Seng continues climb despite dour Chinese news

The Hang Seng Index rose to a seven-month high yesterday with investors buoyed by data seeming to indicate China might have turned the corner.

It rose 0.6% to 21,546.1 and was on the brink of a sixth-straight daily gain, equaling a run made a year ago. The benchmark is now close to the 2012 intra-day high of 21,760.3 posted Feb. 20.

The China Enterprises Index of the top Chinese listings in Hong Kong rose 1.3%.

China said its economy grew 7.4% in the third quarter from a year earlier, its seventh straight quarter of reduced growth but a performance that indicated a hard landing to some economists.

Industrial output and retail sales data in September were slightly better than expected, raising hopes that the Chinese economy may have turned a corner.

Alan Lam, Julius Baer's Greater China equity analyst, said investors have been adding more risk to their portfolio, with funds trying to improve their performance as the year draws to a close.

He also noted China’s current political leadership will not see any need to act more aggressively to grow the economy as growth appears to have stabilized.